There are Two Reasons For Pursuing Major Home Improvement
Projects:
- Just Want To Do It - You want some new features in a home to improve your family's quality of life, but you don't want to leave your current home.
- Really Need To Do It - You want to make your home more marketable to maximize return (or minimize loss) and speed up the sale process.
In the right market conditions, a project might fit into both
categories. Other times, though, the two approaches will conflict:
Just Want To Do It
The project is perceived as a necessary or worthwhile
improvement to your family's lifestyle. Say you have two or three teenagers
in the family and the morning bathroom situation is completely out of
control. It doesn't matter if an additional bath generates a 150 percent
return on investment or actually decreases the value of the home (unlikely,
unless you're a completely incompetent do-it-yourselfer with a bizarre
design sense). The economic impact just doesn't matter. If you have the
money for a new bath and you don't want to move - you add the bath. It's
that simple.
Or say you're a barbecue fiend and the only feature
missing from the dream home you've just purchased is a sprawling backyard
patio with a natural-gas grill custom-built with flagstone and river rock.
Again, return on investment just isn't going to be a critical question. The
improvement becomes more comparable to purchasing a depreciating asset that
you feel is a necessity for your lifestyle - such as an automobile. When the
barbecue aficionado adds a deluxe patio to a home that's already the most
expensive property in the neighborhood - perhaps destroying the entire
backyard in the process - there's a good chance that very little of the cost
will be recouped in a subsequent sale.
An even better example might be a pool. If you're a person
who simply has to have one - fine. Put in a pool. But it's probably worth
checking with a real estate professional first, just to make sure you fully
understand that adding the pool might actually lessen the property's value
and make it more difficult to sell should you later decide to move.
That's the reality in many markets. That doesn't
necessarily mean you shouldn't do it, especially if you're planning to live
in the home for the rest of your life. It just means it's worth knowing the
cost and salability impacts at the front end - even if they're not going to
deter you from pursuing the project.
Really Need To Do It
This home improvement project is pursued primarily to
increase the property's salability. In turn, this often increases your
return on investment. A good real estate agent can advise you of possible
improvements that will attract more potential buyers and also pay for
themselves either through increasing the home's value or through shortening
the time it takes to sell the home.
Here we're typically talking about projects such as:
- Repairing or replacing the roof.
- Painting - either because the existing paint is in bad shape or is
an unusual color; replacing carpets - again because of age, color
style.
- Repairing or resurfacing a cracked driveway or sidewalk.
- Refacing kitchen cabinets.
- Trimming or removing overgrown or unattractive landscaping.
While spending several thousand dollars on your home right
before you sell it might not sound very appealing, it's not uncommon for the
right work to more than pay for itAmax in a higher selling price and shorter
marketing time.
Consult with an experienced real estate agent to learn what
improvements will make your home more marketable in comparison to similar
properties that are now - or recently have been - on the market in your area.
